TRICIA PHILLIPS
Q A
IF you’re made redundant as a result of Covid-19, you will no longer pay into your current workplace pension.
It’s important to think about the longer term and to ensure you put in a claim for benefits while unemployed, so you get National Insurance credits to keep state pension entitlement.
Q A
YOU will still be required to pay into your workplace pension, but the amount will be reduced, based on the level of pay you get while furloughed. Under auto-enrolment, your employer will also continue to pay in a percentage of your current pay.
Q A
AFFORDABILITY is a key issue at a time like this – but on the flip side many would say the best time to buy investments is when their value has fallen, such as in the current market.
If you are struggling to make contributions you can reduce them or take a contribution holiday, but you should consider your options carefully and understand the longer term effect they will have on your pension income.
Q A
IT’S worth remembering a pension is a long-term savings investment and over the years the value will go up and down.
The coronavirus has had a big impact on the investment market, leading to significant and irregular ups and downs in values. A natural first instinct would be to consider moving your pension money to a lower risk fund, however these funds generally have a lower potential for growth long term. If you are planning to make changes, ensure you do so with clear objectives and always considering the long-term implications.
Q A
DECIDING when to take your pension benefits is a complex decision and should be taken with the right advice. This might mean speaking to a financial adviser or taking advantage of a free guidance session with Pension Wise, available to over-50s.
For some, postponing retirement may be a feasible option, while others with more immediate needs may consider taking lump sums from their pension pots to help with bills now. But be aware that dipping into pensions early will mean your pot will need to work much harder to last you throughout your retirement.
Many people reduce their working hours as they get older and use some pension income and some earnings in combination.
Think about whether this might work for you.
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